Bitcoin recently broke below a bearish flag continuation pattern to signal that further losses are in the works. Price could see a same drop as the height of the flag’s mast, which spans $4,300 to $3,800.
The 100 SMA is still above the longer-term 200 SMA, though, so the path of least resistance is to the upside. In other words, bullish momentum is still in play and could allow the climb to resume. Then again, bitcoin has fallen below the 100 SMA as an early indicator of selling pressure and the gap between the moving averages is narrowing to reflect weakening bullish energy.
Price looks poised to test the 200 SMA dynamic support next, and a break below this could send it down to the next area of interest around $3,700. Further declines below that point could drag bitcoin to the next support zone around $3,400 or until the $3,200 lows.
RSI is already indicating oversold conditions, though, so sellers might need to take a break soon and allow buyers to take over. Turning higher could confirm that bullish pressure is kicking back in and that support levels would hold. Stochastic is heading lower and has some room to move south before reaching the oversold region, so a larger dip is still a possibility.
Bitcoin bulls seem to be disappointed over the lack of momentum in the February rallies, taking the dip as a chance to book profits instead. Still, there could be good reason to stay optimistic as many are looking forward to a pickup in institutional investment in the months ahead.
As it is, Fidelity is said to be on its final testing phase before launching its platform that could allow banks and big funds to make bets in the bitcoin space. However, PayPal and Visa have more recently warned that bitcoin presents a “ludicrous” challenge.
The post Bitcoin (BTC) Price Analysis: Next Downside Targets appeared first on Ethereum World News.